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San Luis Delta Mendota Water Authority October 8, 2020

Ger Bennett Banner

The San Luis Delta Mendota Water Authority held its board of directors meeting remotely on Thursday, October 8, 2020 from its Los Banos headquarters by Zoom. Like a lot of folks I have a daily routine I try to follow. I usually read through my emails first. There are a few clipping services I subscribe to in an effort to keep up at least a little with the water news in California. The California Farm Water Coalition is one of the best. https://www.farmwater.org/ It narrows the news down to mostly stories dealing with ag water. I read today Governor Gavin Newsom has made yet another executive order instructing California’s Natural Resources Agency to draw up a plan by February 1, 2022 to conserve 30 percent of the states land and coastal waters by 2030. Wasn’t there a bill recently defeated trying to do the same thing? Yes there was. Assemblyman Ash Kalra put forth a bill to preserve land and water but it was defeated. As I mentioned in a previous report the heart of Kalra’s district sits in the scenic wilderness of downtown San Jose. Is this a sign California’s government is being more efficient – no need to legislate when we can elect a governor who can decree a wish and it comes true?

Roll Call

Chairman Cannon Michael opened the meeting at 9:30am and SLDMWA attorney Becca Akroyd took roll. A quorum was established and things got going. There were no additions or corrections to the agenda and under public comment no one spoke up. Michael did say Director Gary Kremen has recently had a child. Good for him. Congratulations. I’ve had the pleasure of hanging out with Kremen and he’s a pretty good guy. He is also a director at the Santa Clara Valley Water District, known as Valley Water.

The consent calendar was next and this is such a good invention. The board was able to vote on many routine items at once. If someone wants to learn more about an item on the calendar it can be pulled in included in the regular agenda. In this case minutes, O&M reports and certain financial matters. The calendar was approved.

Action Items

COO Pablo Arroyave introduced Lora Carpenter who consults the Authority on bond matters. Some bonds were issued in 2013 and Carpenter went over the debt service and what it would cost to address this in different ways. It’s bonding again with sales starting in December of this year. Westlands Water District is opting to pay off its share in a lump sum and save hundreds of thousands of dollars. Cameron Parks is another consultant. He said interest rates are declining providing an opportunity to reduce debt. The China-itis slowed the municipal bond market in March but things are picking up. He said there may be some volatility in the coming weeks but he has confidence things are shaping up favorably for these bonds. Doug Brown is another bond consultant lawyer who said there will be a need to pass resolutions to get the ball rolling. He said a lot of other stuff about bond transactions. After several things happen the board will be asked to pass another resolution, I believe in November, and that will be all that’s needed to complete the transaction from this side. There were no questions from either the board or the public and the resolution passed unanimously.

Arroyave next told the board it was being asked to approve a single source purchase for unique flowmeters. McCrometer, Inc. is the fortunate manufacturer. Anthea Hansen, General Manager Del Puerto Water District asked if there is any testing before the purchase is made. The answer is yes and the metering is working and there will be a good access to the data. David Weisenberger, GM Banta Carbona ID said they’ve been using McCrometer meters with good success. The board passed a resolution to complete the transaction.

Report Items

Arroyave presented the board with an update on the Jones Pumping Plant Rewind Project. He said the Friant Water Authority has requested to pay its share upfront and that is a good chunk of change. If I understood correctly, enough money to rewind one pump. Akroyd explained further saying a prepayment agreement with Friant has a draft term sheet. This document lays out Friant’s 40 percent share which is higher than the rolling average of 37 percent for Friant’s share. There will be a true up at the end of the project and should a change order occur Friant will self-fund the costs. Any disputes between Friant and SLDM will be settled with already agreed up on resolution procedures. Akroyd asked the board to review the terms and at next month’s meeting it will be asked to approve this agreement. I think it costs more than $5 million per pump to rewind the motor. These are very large pieces of equipment; big as a small house. There’s a crane built into the pump building itself to remove the parts. The pumps were designed to run full out or be turned off. It takes a lot of torque to get them spinning up to speed and the enviro regulations now have them constantly starting and stopping. It wears them out.

James ID GM Steve Stadler pointed out the contractors operating under exchange agreements should be grouped with the Friant rates. SLDM Controller Joyce Machado will look into this. Tom Birmingham, GM Westlands WD asked about bonding to pay for the rewinding and how that impacts interest rates. One of the bonding consultants said the smaller amount of the bond still costs as much to put together as a big bond and that’s why the costs are higher in relation to the amount. SLDM Executive Officer Federico Barajas said depending on the finalization of Friant’s offer to prepay, the board will be asked to make a decision next month. Birmingham asked if the board could reject the Friant agreement. Akroyd said the MOU doesn’t really take that into consideration so rejecting the upfront money would cause the deal to have to be refigured.

Jason Phillips, CEO of Friant Water Authority said Friant doesn’t see an option where Friant couldn’t pay upfront. The offer to pay up front was made because Barajas asked for the help. Friant does not want to pay the extra fees and costs that come with bonding. Birmingham asked if Friant was willing to pay its entire 40 percent share of $4.9 million in November.

Executive Director Report

Michael had to leave the meeting and Director William Bourdeau took the helm. Barajas asked consultant Chris Park to give an update on the raising of the BK Sisk Dam at San Luis Reservoir. Park said they are working on the feasibility report and taking questions from the US Bureau of Reclamation. This should be wrapped up by the end of the year. The Final EIR/SEIS comment period has closed and comment responses are being prepared. He’s continuing to meet with CalTrans for modifications on State Route 152 that winds its way past the project. There is another alphabet salad of agencies requiring permits; from clean air to historical locations have to skip through stacks of paperwork.

The San Luis Transmission Project was next. Frances Mizuno, I don’t know what her title is anymore, said a Request For Proposals has been issued and a public/private combination is the preferred course. Former Congressman, lobbyist/consultant Dennis Cardoza’s firm is helping to put that deal together.

Barajas said SLDM sent a letter to the State Board and one to the Bureau about the raising of Shasta Dam. Presumably in favor. SLDM wants to share offices with an outfit named Chronic. If I recall correctly Chronic is moving from its current downtown Sacramento office and that is being worked out for SLDM to move with them. Another office move afoot is to have the Exchange Contractors and SLDM move in together in one of the empty buildings in downtown Los Banos. That is coming to fruition. Good job guys. Neither entities board rooms are really large enough to hold the meetings without the ambience of the hold of a pressgang galley.

Scott Petersen reported on revisions to the Endangered Species Act that are intended to respond to court decisions and put them in line with practices. SLDM will be sending comments and he thanked the members for helping with this. He said things in Washington DC are pretty much focused on the Supreme Court nomination hearings. He said there will be a much clearer view of how things are going to shape up after the election. God help us. Right now there doesn’t appear to be much happening with infrastructure stimulus. There will be leadership changes on Capital Hill. The chair of the ag committee is retiring and there are three folks vying for this slot. The ranking member of the natural resources committee is retiring and there is some talk about California Congressman Tom McClintock finding a seat there. Petersen also said Newsom issued an executive order to take and protect 30 percent of the state’s land and coastal waters.

Cardoza next spoke and said he’s been talking with folks from congress about infrastructure packages. It appears it will be likely but at a lesser level than expected. I guess he even spoke with Nancy Pelosi who said she’s interested in a package and will be advocating for one after the election. He even said there is a will to return earmarks by some and that largess would accrue to public agencies. He said the Cook Report predicts an eight to 12 seat gain in the House and some loss for Republicans in the Senate. Too tight to tell if the Rs continue with a Senate majority. He said the fresh polls indicate the Harris/Biden ticket is in the lead for the presidential race.

O&M Report

Arroyave said there was some concern about cracking in press plates. I don’t have a clue what a press plate is but as it turned out the situation wasn’t critical and things are going to be OK. He said a firm has been retained to help set salaries and there is a committee set up to guide this process for inclusion in the 2020 budget report.

Water Report

Tom Boardman gave his operations forecast and said declining inflow to the Delta caused one unit to go offline. He said this is a typical fall operations with diversions in the Sacramento Valley for rice decomposition and the Bureau is hanging on to water at the reservoirs. He said the reduce releases will require some storm water to increase exports. There could be some storms in Northern California but not enough to cause any large inflow. Shasta has 2.2 million a/f storage currently. The bar will be raised from 3.2 million a/f to 3.9 million a/f of storage at Shasta to avoid a critical year designation. San Luis was filling pretty well during August and September. Pumping is down and refuge demands are increasing. He said San Luis should fill in late February to mid-March at a 50 percent forecast.

Committee Reports

Birmingham said the water resources committee met. Rick Gilmore, GM said the finance & administration committee did meet but he’d like to hear more from the membership’s opinion on self-funding for the pump rewinds. Chris White, Ex O for the Exchange Contractors said the O&M Technical committee met.

There were no reports from the State & Federal Contractors Water Agency. Mike Wade from the CFWC said his group has been keeping an eye on the water trading contracts. There are a lot of questions surrounding this. The trading funds and indexes are saying they don’t have title to the water and how much this will influence the price to growers. There is a Velis Index that has been fluctuating wildly. Wade asked if anyone knows more about this. Folks I’ve talked with, and one of them (and he knows who I’m talking about) is smarter than any three folks can grab and duck-tape together said it’s very confusing and looks a lot like gambling.

There was no ACWA report and Petersen said the San Joaquin Valley Water Blueprint participated in in the Stanford Unusual Dialog forum. Akroyd said before the meeting could go to closed session one of the directors will have to identify themselves beyond just a phone number. She said there is an existing and pending litigation to deal with in closed session. And that was that.

DISCLAIMER OF RESPONSIBILITY; Waterwrights strives to provide its clients with the most complete, up-to-date, and accurate information available. Nevertheless, Waterwrights does not serve as a guarantor of the accuracy or completeness of the information provided, and specifically disclaims any and all responsibility for information that is not accurate, up-to-date, or complete.  Waterwrights’ clients therefore rely on the accuracy, completeness and timeliness of information from DAW entirely at their own risk. The opinions expressed in this report are those of the author and do not represent any advertisers or third parties.

ALL RIGHTS RESERVED.  Copyright 2020 by WaterWrights.net/DAW

SAN LUIS & DELTA-MENDOTA WATER AUTHORITY was established in January of 1992 and consists of approximately 2,100,000 acres of 29 federal and exchange water service contractors within the western San Joaquin Valley, San Benito and Santa Clara counties. The governing body of the Authority consists of a 19-member Board of Directors classified into five divisions with directors selected from within each division. The main conveyance is the Delta-Mendota Canal that delivers approximately 3,000,000-acre feet of water within the Authority service area. Of this amount, 2,500,000-acre feet are delivered to highly productive agricultural lands, 150,000 to 200,000-acre feet for municipal and industrial uses, and between 250,000 to 300,000 acre-feet are delivered to wildlife refuges for habitat enhancement and restoration.

Board – Chairman: Cannon Michael,

Staff – Executive Director: Federico Barajas, COO: Pablo Arroyave, Attorney: Becca Ackroyd.

Email: youtellus@sldmwa.org 209/826-9696
P.O. Box 2157 Los Banos, CA. 93635

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